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bigduckontax
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 3814
Experience:  FCCA FCMA CGMA ACIS
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Hi there, I own a Limited company. I work from home and

Customer Question

Hi there,

I own a Limited company. I work from home and have a dedicated office set up. I rent a 3 bedroomed house with 6 rooms in total (incl kitchen and bath). I have been advised that I can claim VAT on a sixth of my electricity bill for the quarter. I realise that I cannot claim any monies back for rent, however is there anything else I can claim a one-sixth of the bill/Vat on (Council Tax, Insurance, Water?). If so, what is the VAT rate for utilities etc?

Thanking you in advance.
Submitted: 3 years ago.
Category: Tax
Expert:  bigduckontax replied 3 years ago.
Hello, I'm Keith and happy to help you with your question.

The normal VAT rate for utility charges like gas and electricity is 5%, you can check this from the bills to make sure as some organisations have to apply the full 20%. Council Tax and Insurance are either zero rated or exempt supplies so there is no input tax reclaim available there. Water is a zero rated supply also. I cannot see why you should not set one sixth of the rental against the company's business either. Perhaps you could throw some light on that matter as you say you cannot?
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Customer: replied 3 years ago.

Hi Keith,


 


Thank you very much for the answer. I rent my house through a letting agent and there is no VAT on the invoice, therefore I assumed it was VAT exempt.


 

Expert:  bigduckontax replied 3 years ago.

No VAT on rentals is perfectly normal. Some big property holding companies do, but then when they sell they have to charge VAT on the selling price, rather a show stopper unless the buyer is VAT registered also! Thank you for that, I now see you meant the non existent VAT on the rent, not the rent itself; silly me! I am so glad to have been of assistance.

 

Thank you for your support.

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